SACRAMENTO -- The state of California targets an "underground economy." Agencies are going after businesses that pay employees in cash, avoiding workers compensation insurance and withholding taxes. The state's going high-tech to crack down on those employers.

The Contractors State License Board of California has videotaped numerous sting operations where they catch businesses operating without a license and hiring workers under the table -- meaning those businesses aren't paying payroll taxes, workers compensation insurance or contributing to unemployment benefits like legitimate businesses, and pocketing that money instead.

California's underground economy, which includes the landscaping, restaurant, farming and construction industries, is estimated to cost the state $7 billion per year in lost revenue.

Nj has a huge underground economy, and families really aren’t contibutors. Newark has some fine Iberian restaurants, but it seems there are a few Europeans that own/run them, and every other person there is a non-English speaking suspected alien from South America. Illegals in NJ are targeted by advertisers because they have more discretionary income than Americans burdened with taxes and residential occupancy codes.

It is not just the illegal aspect that is alarming, although it is the largest contributor to the underground economy. Persons collecting unemployment benefits or welfare have every motivation in the world to earn while protecting the state handouts. This is a HUGE problem and exemplifies how the mammoth welfare state is incapable of true oversight.

61
posted on 01/08/2012 3:59:38 PM PST
by RobertClark
("Governments are instituted among Men, deriving their just powers from the consent of the governed")

The funny part about the underground economy though is that a lot of the people in it are not illegals. They just don’t want to be part of “the system”, when “the system” treats them like dogs.

To start with, many do not have permanent addresses and ID papers, nor do they want them. They avoid the official “homeless services”, because they neither want anything to do with those that run them, or those that use them.

Often they are not mentally ill, or stupid, drug addled or alcoholics. They just do not want to “play the game”.

Yes, many do have problems, including outstanding warrants, which are pretty easy to get if you are living outside the system. A lot of people and places both hate and fear people like that. Many are too young, and would be arrested as runaways if caught. But they do not have a family they want to live with, and certainly don’t want to be wards of the state.

So they live and work in the underground, often itinerant, and for many years. They are paid and pay in cash only, and spend a lot of time avoiding the government.

Here’s an idea - let the “cash only” businesses operate as they are - and of course, their employees won’t receive ANY benefits if there’s an accident, or they’re laid off, etc.

In other words - if you want to work for a cash-only business, expect to receive simple cash-only compensation and nothing more. In such an approach, the State’s costs are eliminated - because the worker can’t make a claim with the State.

The terrorists one and the commie statists are winning. On bended knees, I thank the Lord above I was born in the 1950s and not later. I really fear and grieve for future generations of Americans who won’t know freedom.

Bottom line is ya need to go after the greedy business owners and the illegals themselves...

Its out of control...

Ya go after the slut and the pimp...Simple.

You go after every aspect of the problem. It is not just the business owners - who for some are making the decision between going out of business or circumventing oppressive regulation and burdensome taxes. To determine it is greed based without knowledge of all circumstances for each business is a bit disingenuous in my opinion.

I'm not willing to give a pass to welfare recipients and those that are collecting long-term UE benefits who are seeking methods to earn while protecting the monthly payout of our tax dollars.

Let all who have dirty hands face the consequences - which should be extreme and intended to deter others.

69
posted on 01/08/2012 5:08:36 PM PST
by RobertClark
("Governments are instituted among Men, deriving their just powers from the consent of the governed")

In my experience, it is very uncommon for any Chinese-run cash business to be paying their fair share of income taxes. Most likely, a sizable percentage of their sales are completely off the books and well-hidden.

This is one reason why they give you a dirty look if you try to pay with a credit card.

These folks are very adept at cutting costs, and feel no moral imperative to give the state its take.

In Kali, underground and off the books, is the only way to make a living there.

Until the greedy AH business owner finds one of his illegal slaves broke both arms, and it's found the unscrupulous business owner does nothing but hire illegals, doesn't pay withholding taxes, workers comp, etc.

Then they get everything they deserve!

73
posted on 01/08/2012 5:51:40 PM PST
by dragnet2
(Diversion and evasion are tools of deceit)

Going after these criminal employers should have been done 20 years ago.

Where to begin? To start with the government has no business imposing an income tax on people's wages. No one should have to pay tribute to the government just for earning a living. Secondly, this country did fine without one for over 100 years until the corrupt politicians managed to sneak the 16th amendment into the constitution. Thirdly these businesses are not costing the government a frickin dime because most of them wouldn't be running if they followed the law. Many are just barely making it now. A large federal and state sales taxes would take care of the equality of taxes along with doing away with personal and corporate income tax.

Sooooo funny. I can imagine something on the order of the Keystone Cops running around arresting people and then releasing them because they are Hollywood bigshots, Food Stamp President key donors, state reps or senators, state regulators or administrators, etc. I think most legitimate businesses will have left the state so only the illegitimate businesses will be left and they can play the race card. I would guess a lot of smoke and mirrors with less recovered than spent.

80
posted on 01/08/2012 6:53:26 PM PST
by RetiredTexasVet
(There's a pill for just about everything ... except stupid!)

It's corruption to the bone and the greedy don't give a cheet, and they will make every excuse in the world.

It's all about profits regardless of consequences, as the lowly working class tax payer eats the big one and is forced at gun point to subsidize the greedy employers illegal workers...In the form of healthcare, welfare, food stamps, as our hospitals, jails and social services are overwhelmed and economically gang raped.

Going after these illegal alien hiring employers/fatcorps is a priority which has never been addressed because they bankroll the corrupt politicians campaigns and are paid off to look the other way.

It's really a vicious circle of corruption.

81
posted on 01/08/2012 7:15:51 PM PST
by dragnet2
(Diversion and evasion are tools of deceit)

who for some are making the decision between going out of business or circumventing oppressive regulation and burdensome taxes...Bull shit. If they can't conduct themselves by the rules and laws, like thousands of other businesses

You obviously know nothing about running a small business. And by the way the issues is not paying taxes on profit actually earned after expenses. It is the cost in time and money of complying with an incredible and ever-growing burden of regulation, regulation designed by a few big insiders to squelch competitition, by the way. The reason that business are going to sole proprietors with no emplyees, and relying on contract labor for essential services is to get out from under the crushing burden of paperwork to hire a couple of folks. Unless you are big enough to justify an accountant, a lawyer and a full time commpliance officer, you stay solo.

I know of no sector of American life that is not horibly corrupt, actually.

What is rather convenient is that the shortfalls from previous ‘temporary’ personal income tax(PIT) hikes and sales taxes expiring will come out to about $7-$8billion per year according to the California Legislative’s Analyst’s Office.

86
posted on 01/08/2012 7:36:27 PM PST
by Cvengr
(Adversity in life and death is inevitable. Thru faith in Christ, stress is optional.)

Illegal immigration is THE KEY to the perpetuation of the status quo in DC......

Predatory tax and regulatory policies-actions that basically serve to perpetuate and grow governments-leave what business is left in the country seeking disposable labor.

Illegal Labor is the Feds out for preserving the status quo regarding Taxes and Regulation. Interestingly, that is WHY the Feds encourage in-state tuition etc for illegals under-the-table -their presence providing disposable labor allows Federal, State and local regulatory and tax excess in the status quo to continue.

Until all employers are required by law to verify the legal status of all employees, and are punished for hiring illegals, they will continue to game the system for their own benefit and contribute heavily to the rat party!

It’s the entire system than has become corrupt,....no criminal per se, just corrupt.

Those getting in to office are financed by contributions. The contributions are legitimate. If they vote to encourage more business for their supporters, and they have, then the contributions keep coming.

They are small contributions, but their impact are monopolistic for the rest of society in the form of regulations. “permits” for all aspects which can be conceived, such that those who seek to obey legitimate authority are taxed out of business, while those circumventing the system now become the likely contributors to future campaigns.

89
posted on 01/08/2012 7:43:33 PM PST
by Cvengr
(Adversity in life and death is inevitable. Thru faith in Christ, stress is optional.)

The reason that business are going to sole proprietors with no emplyees, and relying on contract labor for essential services is to get out from under the crushing burden of paperwork to hire a couple of folks.

It has nothing to do with bureaucratic paper work, which is a pain, but it's all about the *money* being charged by corrupt government at all levels.

I agree with much and the insurance industry, who is in bed with the government, is a huge factor here, ie: workers compensation insurance/costs, etc.

So are you suggesting businesses are paying illegal alien employees in cash, avoiding workers compensation insurance and withholding taxes, simply because the cost in time and money of complying with an incredible and ever-growing burden of regulation, which is all designed by a few big insiders to squelch competition?

91
posted on 01/08/2012 7:53:04 PM PST
by dragnet2
(Diversion and evasion are tools of deceit)

BTW, I do agree, government at all levels is choking off the American people, by their endless regulation and control of everything.

Bottom line, is government wants total complete control, which is causing unbelievable problems. My issue is, this is no damn excuse for employer/contractors to hire tens of millions of illegal aliens. That's bull cheet.

94
posted on 01/08/2012 8:05:50 PM PST
by dragnet2
(Diversion and evasion are tools of deceit)

I can understand metrics used to calculate the cost illegal aliens have on CA services; $4.5bil/yr K12 schooling; $1.4 prisons; $1.4 medical or about $7-8bil/yr.

I don’t understand the metrics being used to determine the size of an underground economy.

FWIW, I would suspect the homosexual community underground economy to be far greater. The homosexual mindset has been honed to behave without being held accountable to public law, while working to change established institutions to their personal behavioral desires. With 2 income households, they have far greater expendable income than most heterosexual families, so they tend to hide much greater percentages of their income in other properties and they hate being taxed. If anything, they perceive their higher tax rates to be a public form of bigotry against their ‘lifestyle’.

CA homosexuals tout their numbers in CA at over 1.3mil, however some studies find the illegal population in CA to be around twice that number at 2.6mil ( http://www.ppic.org/content/pubs/report/R_711LHR.pdf ). The reported incomes of homosexual partnerships tend to be twice that of heterosexuals and the investment portfolios of homosexuals may increase by nearly an order of magnitude.

Considering the illegal population is more likely to be lower wage earners, it might not be more advantageous economically to further tax that underground economy more than say the homosexual community and its vast underground investment portfolios.

IMHO, the better bang for the buck is to go after the homosexual community to pay their fair share instead of racially discriminating the Latino community.

From the study above, the illegal immigration communities may be far greater in the Asian than Latino communities in more affluent areas.

96
posted on 01/09/2012 2:47:03 AM PST
by Cvengr
(Adversity in life and death is inevitable. Thru faith in Christ, stress is optional.)

Since the tax burden here is one of the highest in the country already, why would you suggest that? It’s NOT the state’s money to begin with. It belongs to the person who’s EARNED it. You must love them gubmint thieves.

98
posted on 01/09/2012 5:25:25 AM PST
by dcwusmc
(A FREE People have no sovereign save Almighty GOD!!! III OK We are EVERYWHERE!!!)

Since the tax burden here is one of the highest in the country already, why would you suggest that?

What's good for the goose... My whole point is that both employer and employee are complicit in the evasion of taxes when working off the books. If the state is going to make a big deal and go after the EVIL employers, equal protection dictates that they also go after the employees who are equally guilty of tax evasion.

Its NOT the states money to begin with. It belongs to the person whos EARNED it.

Agreed...both for employers and employees. But if they go after one, they should go after both.

You must love them gubmint thieves.

Nope...this is actually quite amusing and fun to watch. The government thieves will try to grab more money, and they will fail. People will find ever more creative ways to avoid the tax man. Always have, always will. And that's a good thing.

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